Chief Volatility Officer™️
GM Shrubstack!
By now everyone has read the stories of “suspicious” trading activity before Trump’s tweets, with some “lucky” traders making GAZILLIONS.
I’m not one to stand in the way of a good narrative, but here are my 2 shrub-cents:
This is still the Golden Age of Grift ™️- it’s just that we are not invited!
There are “diminishing returns” to these TACO tweets:
the first “postponement of strikes” TACO tweet on Monday caused a +4% rally in the Nasdaq and a -15% drop in Brent
the second “postponement of strikes” TACO tweet on Thursday caused a measly +1% spike in Nasdaq futures and a very brief -4% drop in Brent. Both reversed since, with the Nasdaq now trading lower and Brent trading higher from “pre-tweet” levels.
Worth noting that the second tweet wasn’t really a TACO, but more of a NACHO:
Not Actually Changing Hormuz Opening.
Chief Volatility Officer ™️
I’m reminded of the story of the “Boy who Cried Wolf”, which we may have to rename to the “President who Cried Ceasefire”.
But I want to be fair to President Trump, because I get what he’s trying to achieve.
He’s aware that the US Economy is now beholden to the Markets and that a Market Crash would basically force him to TACO.
So, as President, he has adopted a new capacity as Chief Volatility Officer (CVO) ™️ whereby he’s effectively trying to suppress volatility and assist the Market into a sort of “managed decline”.
He’s actually done a very good job at that, given the circumstances, with the S&P barely down 8% from its All-time-highs…
Unfortunately, much like in the “Boy who cried Wolf”, the Wolf might still appear and “spoil” this “artificial volatility suppression”, both in the Markets and in Crude…
It’s a bit like keeping a ball underwater for too long. At any point, the ball can propel out of the water violently …
In “It Takes Two to Taco” ™️(March 10th), we raised the probability of a CRASH to 44.44%.
The Nasdaq is already 7% lower since.
However, I’m still still weary of adding risk or giving the “all clear”, given the distinct possibility of the US putting “Boots on the Ground”.
Worth noting that there is a long weekend coming next week, which would be the ideal timing for it. As shrubscribers know very well, in the Golden Age of Grift™️ etiquette dictates that Wars only take place when the Market is closed.
Therefore, a long weekend would be ideal to put “Boots on the Ground”.
All this keeps me uneasy still from adding much risk.
The one area that I am excited about is “The Next Big Trade” that we have outlined below. That one is worth reading again:
Good luck out there!
🌳🙏
Disclaimer:
This isn’t financial advice. This is Parody. This is the equivalent of Monty Python for finance, but worse: This is the trading blog of a shrub. For all you know, I could be a 15-year old paper-trading out of my parents’ basement. Don’t be Stupid. Seriously. How many times do I have to repeat this …
Attacking a Muslim country on Easter …
Gm Shrub, good note.